Poland Scraps £2bn Airbus Helicopter Deal

Poland has scrapped a $3bn (£2bn) deal to buy 50 Airbus helicopters and will instead purchase just a handful of aircraft from the European company, it has been reported.

The decision, reported by Poland's Rzeczpospolita newspaper, could strain relations with France, where the aircraft are made and the performance of the manufacturing sector and wider economy have been sluggish.

It (Other OTC: ITGL - news) could also hold back a military programme that was accelerated over the Ukraine crisis by Poland's previous government.

Poland had agreed a provisional deal with Airbus for 50 EC-725 Caracal multi-purpose helicopters before elections in October won by the eurosceptic Law and Justice party.

It has repeatedly said it would rather see the deal awarded to a producer manufacturing locally. America's Sikorsky and Italy's AgustaWestland both have facilities in Poland.

Buying Sikorsky aircraft could help curry favour with Washington as Poland seeks a greater NATO presence to shore up its eastern border.

Airbus has proposed a so-called "offset programme" that would source work on its helicopters in Poland, but foreign minister Witold Waszczykowski has described that as "leftovers" with those aircraft mostly being built in France.

The French defence ministry has now agreed Poland will only buy "several" helicopters from Airbus, Rzeczpospolita reported, quoting a Polish defence ministry source.